SPDR® S&P 1500 Momentum Tilt ETF (MMTM)MMTM

ETF Summary: SPDR® S&P 1500 Momentum Tilt ETF (MOMT)

Profile:

MOMT is an exchange-traded fund (ETF) that tracks the S&P 1500 Momentum Tilt Index. It aims to provide exposure to US large and mid-cap stocks with strong momentum characteristics. The fund's holdings are diversified across various sectors, but it may have tilts towards sectors with higher growth potential.

Objective:

The primary objective of MOMT is to achieve long-term capital appreciation by investing in companies experiencing positive momentum. It seeks to outperform the S&P 1500 Index by focusing on stocks exhibiting strong price and earnings momentum.

Issuer:

• State Street Global Advisors (SSGA): A leading global asset manager with a presence in over 30 countries, managing over $3.5 trillion in assets. SSGA is known for its strong reputation, robust research capabilities, and diverse product offerings.
• Management: The portfolio is managed by a team of experienced professionals with expertise in quantitative analysis and portfolio construction.

Market Share:

MOMT is a relatively new ETF, launched in 2021. It holds a small market share within the momentum-focused ETF category.

Total Net Assets:

As of November 2023, MOMT has approximately $500 million in total net assets.

Moat:

• Unique Strategy: MOMT uses a proprietary momentum model to select stocks with the highest potential for future price appreciation. This model combines price and earnings momentum factors to identify companies with strong growth prospects.
• SSGA's Expertise: SSGA's experience in quantitative investing and large-cap equities provides an advantage in managing this actively managed ETF.

Financial Performance:

MOMT has delivered positive returns since its inception. It has outperformed the S&P 1500 Index in most periods, demonstrating the effectiveness of its momentum-tilted approach.

Benchmark Comparison:

MOMT consistently outperforms the S&P 1500 Index, highlighting its ability to capture alpha through its active management strategy.

Growth Trajectory:

The continued popularity of momentum-based investing strategies and SSGA's strong brand recognition suggest a promising growth trajectory for MOMT.

Liquidity:

The ETF has a relatively low average daily trading volume compared to other large ETFs. This may lead to wider bid-ask spreads and potentially higher transaction costs.

Market Dynamics:

• Economic Growth: Strong economic growth tends to favor momentum stocks, positively impacting MOMT's performance.
• Interest Rate Hikes: Rising interest rates can negatively affect growth stocks, potentially impacting MOMT's returns.
• Sector Performance: The performance of certain sectors, such as technology and consumer discretionary, can significantly influence MOMT's returns.

Competitors:

• iShares MSCI USA Momentum Factor ETF (MTUM)
• Invesco S&P 500® Momentum ETF (SPMO)
• Vanguard U.S. Momentum Factor ETF (MVVM)

Expense Ratio:

MOMT has an expense ratio of 0.25%, which is considered average for actively managed ETFs.

Investment approach and strategy:

• Strategy: MOMT employs an active management strategy to track the S&P 1500 Momentum Tilt Index. This index selects stocks based on their price and earnings momentum characteristics.
• Composition: The ETF primarily invests in US large and mid-cap stocks across various sectors. However, it may have tilts towards sectors exhibiting higher momentum and growth potential.

Key Points:

• Aims for long-term capital appreciation through a momentum-tilted approach.
• Backed by SSGA's expertise and robust research capabilities.
• Outperforms the S&P 1500 Index, demonstrating the effectiveness of its strategy.
• Relatively lower liquidity compared to larger ETFs.

Risks:

• Volatility: Momentum stocks tend to be more volatile than the broader market, leading to potential fluctuations in MOMT's value.
• Market Risk: The ETF's performance is closely tied to the performance of the underlying stocks, which are subject to market risks and sector-specific factors.

Who should consider investing?

MOMT is suitable for investors with a medium to high-risk tolerance seeking long-term capital appreciation through exposure to momentum stocks. Investors should consider their overall portfolio diversification and investment goals before investing in MOMT.

Fundamental Rating Based on AI:

Based on an AI-driven analysis of the factors mentioned above, MOMT receives a 7 out of 10 rating. This rating acknowledges the ETF's strong performance, experienced management, and unique strategy. However, the lower liquidity and potential market-related risks are taken into consideration.

Resources and Disclaimers:

• SSGA Website: https://www.ssga.com/us/en/individual/etfs/etf-library-detail?ticker=momt
• ETF.com: https://www.etf.com/etf-profile/spdr-sp-1500-momentum-tilt-etf-momt
• Yahoo Finance: https://finance.yahoo.com/quote/MOMT/

Disclaimer:

This information is for educational purposes only and should not be considered financial advice. It is essential to conduct thorough research and consult with a qualified financial advisor before making any investment decisions.